Digest Highlights: A Missouri program reimburses MPP-Dairy participants. CDC’s investigation into a salmonella Heidelberg outbreak tied to dairy calves is closed. Alan Zepp compares margin protection options. Find a summary of this and other news here.
Missouri MPP-Dairy premium reimbursement checks likely in March
Missouri dairy farmers who participated in the federal Margin Protection Program for Dairy (MPP-Dairy) and apply for a special state reimbursement program should receive checks in March.
The state’s Margin Insurance Premium Assistance program was established under the Missouri Dairy Revitalization Act (MDRA). Among its provisions, it provides reimbursement of up to 70 percent of MPP-Dairy buy-up coverage premiums – up to a maximum of 34 cents per hundredweight (cwt) – for 2015-17 program years.
Dairy farmers seeking reimbursement must pay a state administration fee of $25 per program year they are seeking reimbursement. Application deadline closes Feb. 28.
The MDRA also provides $40,000 for the Missouri Dairy Scholars Scholarship Program. Students may qualify for up to $5,000 in scholarships if they are enrolled in a two-year or four-year Missouri college and work on a dairy farm or have a dairy-related internship. Students must also make a commitment to work in Missouri’s agriculture industry as a condition of receiving the scholarship.
CDC closes salmonella Heidelberg investigation
The Centers for Disease Control and Prevention (CDC) has closed an investigation into a multistate outbreak of salmonella Heidelberg infections, with a likely source traced back to dairy bull calves from Wisconsin.
CDC identified 56 people in 15 states who became ill between Jan. 27, 2015, and Nov. 25, 2017. Of those, about one-third were hospitalized; no deaths were reported.
Of the 54 people interviewed, 34 reported contact with dairy calves or other cattle. Some of the ill people reported that they became sick after their dairy bull calves became ill or died.
In late 2016, findings identified dairy bull calves from livestock markets in Wisconsin as the likely source of infections. Additionally, laboratory tests found the clinical isolates resistant to numerous antimicrobials.
CDC warned that illnesses could continue. People can become infected by salmonella bacteria through contact with animal manure, but it can also be passed from person to person. Officials urged cattle farmers and veterinarians to take hygiene, biosecurity and testing measures to minimize the potential for infection and spread. Find advice for veterinarians and anyone handling livestock on the CDC website.
USDA offers loan repayment program for veterinarians
Veterinarians willing to practice in 140 areas of major dairy states are among those eligible for federal funds designed to address food-animal veterinarian shortages.
The USDA’s Veterinary Medicine Loan Repayment Program (VMLRP) reimburses qualified student loan debt in exchange for veterinarians working in rural areas of need. If selected, veterinarians must commit to at least three years in rural practice to receive $25,000 annually in loan repayments.
According to the American Veterinary Medical Association, veterinarians graduate with an average debt load of $141,000.
Maximum areas eligible in USDA’s list of major dairy states range from two in Vermont to eight in California, Colorado and Texas. Most other dairy states have five to seven areas designated as veterinary “shortage” situations. An interactive map of designated areas is available at the USDA National Institute of Food and Agriculture website.
UH organic research herd earns quality award
The University of New Hampshire Agricultural Experiment Station’s organic dairy research farm received a 2017 Gold Quality Award from the Organic Valley Cooperative.
Award nominees are evaluated on their systems of monitoring udder health, milking routine, protocols for detection and treatment of clinical and subclinical cases, treatment protocols, and strategies for overall herd health and welfare. Somatic cell counts must average less than 100,000 cells per milliliter.
Last year, the research farm’s 100-animal Jersey herd increased milk production by nearly 127,000 pounds as a result of management practices implemented by the farm’s new manager, Ryan Courtright. In addition to improving management practices, he also has reduced feed costs at the farm.
WOTUS rule, delay subject of more lawsuits
As it has been seemingly since inception, the U.S. Environmental Protection Agency’s Waters of the U.S. (WOTUS) rule is the subject of additional lawsuits.
On Feb. 6, Scott Pruitt, administrator of the U.S. Environmental Protection Agency (EPA), announced the WOTUS rule would be delayed until 2020 as the agency drafts a revised version of the rule.
Shortly after that announcement, attorneys general from nine states (California, Connecticut, Maryland, Massachusetts, New Jersey, New York, Oregon, Rhode Island, Vermont and Washington) and the District of Columbia filed a lawsuit in the U.S. District Court for the Southern District of New York, challenging the delay.
On Feb. 9, the National Pork Producers Council and a diverse coalition of agricultural and business groups filed a request in the U.S. District Court for the Southern District of Texas seeking a nationwide preliminary injunction against enforcement of the WOTUS rule. They argue that the EPA’s repeal-and-replace process likely will be subjected to legal challenges and that “a nationwide preliminary injunction is imperative."
Butterville Farms receives ‘Dairying for Tomorrow Award’
Butterville Farms in Adams, New York, was recently recognized as the winner of the American Dairy Association North East 2017 “Dairying for Tomorrow Award” in the animal care category.
The multigeneration 1,280-cow Butterville Farms was cited for its cow comfort and animal care practices. The herdsman is Dave Frederick, and Adam Miner, Poulin Grain, serves as the nutrition consultant.
“Healthy and comfortable cows are our top priority,” said Anthony Barney. “Our cows come first with every decision and improvement that we make on the farm, because comfortable cows make the best milk.”
American Dairy Association North East created the Dairying for Tomorrow Award to recognize local dairy farmers and showcase on-farm practices that will help sustain the dairy industry. Awards are presented in three categories: animal care, community and/or consumer outreach and environmental stewardship. Dairy farms in New York, Pennsylvania, New Jersey, Maryland, Delaware and northern Virginia are eligible.
USDA ‘Farms and Land in Farms’ highlights
The USDA’s National Agricultural Statistics released its annual Farms and Land in Farms report for 2017.
Highlights include:
• The number of farms in the U.S. in 2017 was estimated at 2.05 million, down 12,000 farms from 2016.
• Total land in farms, at 910 million acres, decreased 1 million acres from 2016.
• The average farm size for 2017 was 444 acres, up 2 acres from the previous year.
The report provides state-by-state information on farm numbers, land in farm and average farm size. It also differentiates farms into six economic classes based on annual sales.
Similar to the previous year, over 30 percent of all farmland was operated by farms with less than $100,000 in 2017 sales. Forty-one percent of all farmland was operated by farms with sales of $500,000 or more. Producers with annual sales of $1 million or more operated 1.3 million more acres than in 2016.
Nondigester manure management project grants awarded
The California Department of Food and Agriculture (CDFA) awarded $9.64 million in grants to 17 on-farm manure management projects. The Alternative Manure Management Program (AMMP) funds nondigester alternatives in an effort to reduce greenhouse gas emissions.
Among the projects approved:
• Barcellos Farms will replace a flush/retention pond system with scrape lanes, solid separation, manure drying and stacking.
• Lafranchi Ranch will convert an existing flush system to dry scrape, adding a screw press to improve efficiency to its composting business.
• Regli Jerseys will convert from a fully scraped manure system to incorporating a solid separation and composting system.
• Sierra View Dairy and Alexandre EcoDairy Farms will add bed-pack compost barns.
A complete list of grant recipients is available online.
CDFA will open the application period for the 2018 round of grants in March. Applications are due in May, with funds to be awarded in August. See the AMMP website for more information.
Margin protection options compared
Alan Zepp, risk management program manager at Pennsylvania's Center for Dairy Excellence (CDE), reviewed Margin Protection Program for Dairy (MPP-Dairy), the Livestock Gross Margin-Dairy (LGM-Dairy) program and puts and options on the Chicago Mercantile Exchange (CME) futures market during his monthly “Protecting Your Profits” conference call on Feb. 21.
Looking at market fundamentals, Zepp said U.S. milk cow numbers have plateaued but have not declined. U.S. inventories of dairy products are high but not burdensome by themselves. However, European Union (EU) intervention stocks of milk powders continue to weigh on global prices. Global milk production is starting to decline.
U.S. consumer confidence is at a 17-year high; unemployment is at a 17-year low. Impacting exports, the U.S. dollar index is at its lowest point since 2014, but still strong relative to 2004-14. U.S. dairy product prices are very competitive on the world market.
The current CME cash cheddar price of $1.54 per pound was less than the latest Global Dairy Trade (GDT) auction price of $1.70 per pound and the EU price of $1.78 per pound. CME butter was trading about $2.10 per pound, below the GDT average of $2.39 per pound, and the price in Germany of $2.48 per pound. Finally, the CME nonfat dry milk powder was trading at about 71 cents per pound, compared to the GDT average of 88 cents per pound and 77 cents per pound in Germany.
Margin protection options
Zepp summarized various risk management options:
• At the time of the call, CME Class III futures contracts for the remainder of 2018 averaged just over $15 per hundredweight (cwt), well below the five-year average. The Class IV futures projected average was $14.18 per cwt. A September 2018 Class III futures contract was trading at $15.95 per cwt. A $16 per cwt at-the-money put cost 74 cents per cwt; a $15 put option, similar to a $1 deductible LGM-Dairy policy, cost 32 cents per cwt.
• The next sales period for LGM-Dairy margin insurance coverage is Feb. 23-24. The LGM-Dairy insurable margin for the 10-month period (April 2018 through January 2019) averaged $6.43 per cwt. Cost for coverage for the entire period was estimated at 55 cents per cwt for a $0 deductible policy; 15 cents for a $1 deductible policy.
For producers looking to protect margins later this year (September 2018-January 2019), the insurable margin averages $6.92 per cwt. The cost would be 71 cents for a $0 deductible policy and 61 cents for a $1 deductible policy.
• The current estimated MPP-Dairy margin for the remainder of 2018 is about $7.89 per cwt. As of Feb. 15, the Program on Dairy Markets and Policy projected monthly MPP-Dairy margin to be near $8 per cwt for January (announced Feb. 27), declining to near $7 per cwt for February through June, before moving somewhat higher and settling near $9 per cwt for the final quarter of the year. Depending on desired margin coverage, and how USDA applies premiums when enrollment reopens, full-year premiums are listed in Table 1.
Zepp’s next Protecting Your Profits call will be March 28, preceding the March 30-31 LGM-Dairy sales period. All calls are recorded and archived.
Agropur reports record sales, earnings
Officials with Canadian-based Agropur Cooperative reported record sales and operating earnings for fiscal 2017 during the organization’s annual meeting on Feb. 14.
For the fiscal year ended Nov. 1, 2017, Agropur reported sales of $6.4 billion, a year-over-year increase of 7.7 percent. Earnings from operations rose 7.9 percent to $444.1 million, with net earning estimated at $174.9 million. The co-op paid out about $65.2 million in patronage dividends in 2017, up 8.5 percent from 2016 (all $ Canadian).
Agropur is showing profitable growth on both sides of the Canadian-U.S. border, according to President René Moreau. The increases were due in part to higher cheese prices and higher volume in the U.S., as well as the acquisition of ice cream and frozen novelties manufacturer Scotsburn in Canada.
Agropur also invested more than $174 million in its facilities in 2017, including $133 million in Canada. In the U.S., the co-op will triple processing capacity at its cheese-manufacturing facility in Lake Norden, South Dakota, which is expected to be fully operational in early 2019.
According to the company, the 3,290-member Agropur is the largest dairy-processing cooperative in North America and the 20th largest in the world. In 2017, Agropur processed nearly 6.1 billion liters (138.7 million hundredweights) of milk at its 39 North American plants (including joint ventures). 
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