Digest Highlights

Lawmakers urge additional dairy aid

More than 20 U.S. Senators have signed a letter urging the USDA to provide additional direct payments to dairy farmers through the Coronavirus Food Assistance Program (CFAP) or other new or existing programs.

Natzke dave
Dave Natzke
Editor / Progressive Dairy

The letter, sent to U.S. Ag Secretary Tom Vilsack, highlighted the impact of the COVID-19 pandemic on supply chain and market volatility, as well as increasing feed, labor, equipment and energy costs facing dairy farmers. It also called attention to the impact of Class I milk pricing formula changes, which the National Milk Producers Federation (NMPF) said has resulted in $725 million in lost income for dairy farmers.

The USDA has announced a new COVID-19 pandemic nutrition assistance strategy that moves away from the distribution of food boxes at the end of May. While the Farmers to Families Food Box program will no longer be a major outlet for large-scale dairy product distribution, the USDA announced it would implement the Dairy Donation Program (DDP). That plan reimburses participating dairy cooperatives and processors for the donation, processing, transportation, temporary storage and distribution of eligible dairy products.

The USDA also previously expanded CFAP payments to specialty crop and some livestock producers, but no additional aid is directed specifically to dairy producers.

At Progressive Dairy’s deadline, there has been no update from the USDA concerning a law allowing smaller dairy producers to update their Dairy Margin Coverage (DMC) milk production history baselines and become eligible for a supplemental DMC payment. The adjustment was approved in a COVID-19 relief bill, signed into law in late December 2020.

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2021 fluid sales slid lower in March

Here’s an update on U.S fluid milk sales data from the USDA Agricultural Marketing Service for March 2021.

  • Total sales: March 2021 sales of packaged fluid milk products totaled 3.92 billion pounds, down about 7.5% from the same month a year earlier. At 11.38 billion pounds, year-to-date (January-March 2021) sales of all fluid products were down 5.3%.

  • Conventional products: March sales totaled 3.67 billion pounds, down 8%. Flavored whole milk and reduced-fat (2%) flavored milk were the only major categories showing growth, up 22% and 13%, respectively. Year-to-date sales of conventional products are down 5.9% at 10.65 billion pounds.

  • Organic products: Monthly sales totaled 255 million pounds, up 0.2% from a year earlier. Most major organic categories posted small gains compared to a year earlier. Year-to-date sales of organic products are up 4.8%. Organic represented almost 6.5% of total fluid product sales in March 2021.

The U.S. figures represent consumption of fluid milk products in federal milk marketing order (FMMO) areas and California (now a part of the FMMO system), which account for approximately 92% of total fluid milk sales in the U.S. Sales outlets include food stores, convenience stores, warehouse stores/wholesale clubs, nonfood stores, schools, the food service industry and home delivery.

USDA seeks cheddar, Swiss cheese

The USDA is seeking bids to deliver cheddar and Swiss cheese for use in federal food and nutrition assistance programs, with deliveries scheduled between July 1-Sept. 30. Bids, which close May 27, are being sought for:

  • Cheddar cheese: 529,200 pounds in cases of 12 1-pound chunks and 705,600 pounds in cases of six 2-pound packages

  • Swiss cheese: 120,960 pounds in cases of 12 1-pound packages and 1.742 million pounds in cases of six 24-ounce packages

Global Dairy Trade index down slightly

The index of Global Dairy Trade (GDT) dairy product prices fell 0.2% in the latest auction, held May 18. A price summary of individual product categories follows:

  • Skim milk powder was up 0.7% to $3,444 per metric ton (MT).
  • Butter was down 2.2% to $4,929 per MT.
  • Whole milk powder was down 0.2% to $4,123 per MT.
  • Cheddar cheese was up 1% to $4,321.
  • Anhydrous milk fat was down 0.1 to $5,730 per MT.

The next GDT auction is June 1.

USDA sets LMR program webinars

The USDA will host a series of three educational webinars, June 8-10, covering USDA’s Livestock Mandatory Reporting (LMR) Program. Targeted to cattle producers, feeders and others in the U.S. beef supply chain, the free webinars will be held 6-7:30 p.m. (Central time) each day. Topics include:

  • June 8: Utilizing LMR live cattle reports
  • June 9: USDA LMR boxed beef reports – How quality grade impacts value
  • June 10: Using LMR reports in the real world: an industry panel

Pre-registration is required.

Things you might have missed

  • Citing a lack of progress in ongoing consultations started last December, a group more than 60 dairy companies and associations urged U.S. Trade Representative (USTR) Katherine Tai to initiate a dispute settlement case with the Canadian government over its dairy tariff-rate quota (TRQ) administration. Led by NMPF and the U.S. Dairy Export Council (USDEC), U.S. dairy industry representatives contend the TRQ policies run counter to Canada’s commitments under the U.S.-Mexico-Canada Agreement (USMCA). USDEC and NMPF charge that Canada’s TRQ allocations limit U.S. dairy product imports by reserving the bulk of quota access to Canadian processors. The new dairy TRQ year begins July 1.

  • The International Dairy Foods Association (IDFA) issued a set of 13 “U.S. Dairy Trade Principles on Environmental Sustainability” principles to serve as a guide for U.S. negotiators seeking to implement the Biden administration’s sustainability-focused trade agenda.

  • Members of the House and Senate and both political parties urged the U.S. Department of Justice (DOJ) to continue its investigation into the nation’s four largest meatpackers, Tyson Foods, JBS, National Beef and Cargill. In a letter to Attorney General Merrick Garland, the lawmakers also asked the DOJ’s antitrust division to provide updates on findings.

Coming up

  • The USDA’s Milk Production report, estimating April milk and cow data, was released after Progressive Dairy’s digital newsletter deadline on April 20. Check our website for the numbers and analysis.

  • For a risk management update, Pennsylvania’s Center for Dairy Excellence (CDE) is hosting its monthly “Protecting Your Profits” webinar on May 26, beginning at noon (Eastern time).

  • California dairy producers have until June 1 to vote on a plan to sunset the state’s Quota Implementation Plan (QIP). A “yes” vote adopts a plan which adjusts the regional quota adjuster to the equivalent of $1.43 per hundredweight and then continues with both the quota payments and an assessment on all grade A milk produced in California until Feb. 1, 2025, at which time the whole program will terminate. A “no” vote continues the current program.

  • The All-American Dairy Show will return as a live event in 2021, scheduled for Sept. 18-22, at the Pennsylvania Farm Show Complex and Expo Center in Harrisburg, Pennsylvania.  end mark