Digest Highlights: USDA posts delayed dairy checkoff reports. Fluid milk’s downward consumption trend continues. Find a summary of these stories and updates on previous Progressive Dairyman news stories here.
USDA submits dairy checkoff reports
The USDA is catching up on providing dairy checkoff program reports to Congress.
The federally mandated reports summarize activities for the dairy farmer-funded National Dairy Promotion and Research Program (NDB) and the milk processor-funded Fluid Milk Processor Promotion Program (MilkPEP). The reports include an accounting of funds collected and spent, and an independent analysis of the effectiveness of both programs' advertising campaigns.
In September, the Organization for Competitive Markets (OCM) brought USDA reporting delays to light, noting the agency had failed to provide annual reports to House and Senate ag committees dating back to 2012. However, those associated with the reporting process said the delays were not intentional or an effort to mislead. Read: USDA failed to provide dairy checkoff reports.
Recent reports added to the USDA website cover 2013-2014 combined, and 2015. In the past, reports lagged by a year to acquire all financial data for the previous year. The 2016 report is nearing completion, according to Wayne Watkinson, of the Washington D.C.-based law firm of McLeod, Watkinson & Miller. Watkinson serves as legal counsel for Dairy Management Inc. (DMI), which manages NDB activities.
Due to their length, Progressive Dairyman is reviewing the reports and will provide summary analysis in upcoming issues of PD Extra and Progressive Dairyman magazine.
August fluid milk sales trend continues
The long-run trend of declining consumption of fluid milk continues, while per capita consumption of other dairy products has been growing.
August 2017 total U.S. packaged fluid milk sales were estimated at just over 4 billion pounds, down 2.6 percent from August 2016, according to the USDA’s Dairy Market News. U.S. sales of conventional products totaled 3.8 billion pounds, down 2.8 percent from the previous year, while sales of organic products, at 218 million pounds, were down 0.2 percent. Organic represented nearly 5.4 percent of total sales for the month.
Compared to August a year earlier, sales of conventional and organic whole milk posted gains of 2 percent and 4 percent, respectively, with sales of flavored whole milk up 10 percent. However, sales of conventional and organic reduced-fat, low-fat and skim varieties were lower.
Through the first eight months of the year, U.S. fluid milk sales totaled 31.6 billion pounds, down 2.2 percent compared to the same period a year earlier. Year-to-date 2017 sales of conventional products totaled 29.9 billion pounds, down 2.3 percent. January-August 2017 sales of organic products, at 1.7 billion pounds, were up 0.8 percent. Organic represented nearly 5.4 percent of total sales for the month.
Research cited in recent USDA reports to Congress regarding the National Dairy Promotion and Research Program and the Fluid Milk Processor Promotion Program indicate declining consumption reflects changes in the frequency of fluid milk intake, rather than changes found in portions. The majority of Americans born in the 1990s tend to consume fluid milk less often than those born in the 1970s, who in turn consume fluid milk less often than those born in the 1950s.
The U.S. figures represent consumption of fluid milk products in federal milk order marketing areas and California, which account for approximately 92 percent of total fluid milk sales in the U.S. Sales outlets include food stores, convenience stores, warehouse stores/wholesale clubs, non-food stores, schools, the foodservice industry and home delivery.
Wisconsin: Cull license plate slogan?
A suggestion that Wisconsin remove the “America’s Dairyland” slogan from motor vehicle license plates isn’t sitting well.
Kurt Bauer, executive director of Wisconsin Manufacturers & Commerce (WMC), floated the idea during an organization luncheon. He later said WMC would not lobby for the change, but suggested the state needed an image makeover reflecting a more modern, business-friendly environment.
Dairy means business and innovation, according to the head of the Wisconsin-based Dairy Business Association (DBA).
“Considering the dairy community’s continuing contribution to the culture and economy of our state, it would be disheartening to make such a change after nearly 80 years,” said Mike North, DBA president. “We are talking about a $43.4 billion impact on the Wisconsin economy and tens of thousands of jobs. There are few single products in this state that provide more of an economic boost.
“Our farms, processing plants and universities are looked to from around the globe for technological advances. Innovation and modernization abound in dairy food production and safety, animal care and nutrition, environmental stewardship and numerous other facets of dairying,” North said. “The dairy community — with its hard-working farm families, cheesemakers and host of other supporting businesses — has been the backbone of this state for well over a century. That heritage, and how far we have come, should be great sources of pride. Those are things to be celebrated, not hidden.”
Dallas Fed: Interest rates move higher
Entering the final quarter of 2017, improved moisture levels and higher expected crop yields provided a more optimistic outlook for bankers in the Federal Reserve Bank of Dallas district. The district covers all or portions of Texas, New Mexico and Louisiana.
District average interest rates on fixed- and variable-rate operating loans moved higher during the third quarter. At 5.96 percent, interest rates on variable-rate operating loans were the highest since early 2013. Interest on fixed-rate operating loans averaged 6.3 percent, the highest since the first quarter of 2014.
Overall demand for agricultural loans decreased for an eighth consecutive quarter, while loan renewals and extensions increased. The rate of loan repayment declined slightly after stabilizing the previous quarter.
Ranchland and dryland values decreased in the third quarter, while irrigated cropland values increased. Lenders responding to the survey expect farmland values to trend up in the upcoming months.
Comments from southern New Mexico indicated forage crop producers faced price stress as more dairy producers sought to grow their own feeds.
New study: Livestock production contributes to global food security
A new study published in Global Food Security found livestock place less burden on the human food supply than previously reported. Even stronger, certain production systems contribute directly to global food security because they produce more nutrients for humans than they consume.
"As a livestock policy officer working for the Food and Agriculture Organization (FAO) of the United Nations, I have been asked many times by the press to report on the negative environmental impacts of livestock," explained lead investigator Anne Mottet, PhD. "Doing so, I came to realize that people are continually exposed to incorrect information that is repeated without being challenged, in particular about livestock feed."
Raising livestock is often pointed to as an inefficient system because animals consume food that could potentially be eaten by people. Frequently cited studies put the consumption of grain needed to raise 1 kilogram of beef between 6 kilogram and 20 kilogram. Contrary to these high estimates, the investigation found that an average of only 3 kilogram of cereals are needed to produce 1 kilogram of meat.
It also shows important differences between production systems and species. For example, because they rely on grazing and forages, cattle need only 0.6 kilogram of protein from human food to produce 1 kilogram of protein in milk and meat.
In addition, the study determined about 86 percent of livestock feed, which includes residues and by-products, is not suitable for human consumption.
"Animal production, in its many forms, plays an integral role in the food system, making use of marginal lands, turning co-products into edible goods, contributing to crop productivity and turning edible crops into highly nutritious, protein-rich food," Mottet said.
For more information, read Anne Mottet et al, Livestock: On our plates or eating at our table? A new analysis of the feed/food debate, Global Food Security (2017). 
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