Digest Highlights

2020 fluid sales volumes updated

The USDA’s Agricultural Marketing Service updated fluid milk sales reports through May 2020: The news was mixed, with overall sales holding ground.

Natzke dave
Dave Natzke
Editor / Progressive Dairy
  • Year-to-date (January-May) 2020 sales of packaged conventional and organic fluid milk totaled 19.6 billion pounds, up 0.2% compared to January-May 2019.

  • January-May 2020 sales of conventional products totaled 18.4 billion pounds, down 0.5% from the previous year. Year-to-date sales of whole milk were up 6.5% at 6.66 billion pounds, and reduced-fat (2%) milk sales were up 3.3% to 6.2 billion pounds. Sales of all other varieties were lower compared to a year earlier, with fat-free and flavored 2% showing the largest declines on a percentage basis.

  • January-May 2020 sales of organic products, at 1.2 billion pounds, were up 13% from a year earlier. Among individual varieties, sales of whole milk and 2% organic milk were up 17% and 18%, respectively, while sales of 1% milk were down 3.2%.

While the USDA figures represent sales through May, August and the uncertain opening of schools will begin to impact fluid milk sales going forward. States and school districts are applying mixed systems of reopening schools, which all impact both retail and food service milk consumption.

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, non-food stores, schools, the food service industry and home delivery.

Retail dairy sales remain strong into August

While the USDA Ag Marketing Service update (above) reflects relatively flat overall fluid milk sales through May, the latest report from the International Dairy Deli Bakery Association (IDDBA) shows continued strength in retail sales of dairy products at grocery stores. The update is based on Information Resources Inc. (IRI) U.S. grocery store sales data for the week ending Aug. 2.

The value of retail sales of dairy products was up 12% compared to the comparable week a year earlier, extending a run into a fifth month that weekly grocery store dairy sales were double-digit higher than the year before.

Advertisement

“While the lowest gain since the onset of the pandemic, dairy sales have managed 21 weeks of consecutive double-digit increases,” said Abrielle Backhaus, IDDBA research coordinator. “Dairy is benefitting from increased usage across many meal occasions, and the more we can underscore the use of the wide variety of dairy items for breakfast, lunch, dinner and snacks throughout the day, the better our sales prospects for weeks to come.”

For the week ending Aug. 2, natural cheese sales were up almost 18% by value and more than 13% by volume compared with the similar week a year ago. Fluid milk sales were up 6.5% by value and 0.2% by volume; processed cheese sales were up more than 11% in value and 2.7% in volume.

Weekly butter sales volume growth, up 19.5%, continues to outpace sales value, up 16%. Sales of yogurt were up about 2.5% on both a value and volume basis, while sales of cream cheese grew about 15% by value and 12% by volume.

In the deli department, random weight deli cheese dollar gains dipped just below double digits, up 9.9%. Fixed-weight cheese had even higher gains, up nearly 16.5%.

CFAP dairy payments jump

After slowing through late July and early August, Coronavirus Food Assistance Program (CFAP) dairy payments jumped about $350 million last week and are likely to jump again as this week as distribution of second-installment payments is scheduled to begin. Read: CFAP update: Second installment payment to begin Aug. 17.

As of Aug. 17, dairy applications processed by Farm Service Agency (FSA) offices stood at 22,983, with direct payments totaling just over $1.685 billion. Applicants and payments were up 341 and about $350 million, respectively, from the week before.

The top states for CFAP dairy payments as of Aug. 17 were:

1. Wisconsin: $330.7 million – 5,761 applicants
2. California: $248.7 million – 951 applicants
3. New York: $159.9 – 2,523 applicants
4. Minnesota: $103.9 million – 2,382 applicants
5. Pennsylvania: $100.8 million – 2,529 applicants
6. Michigan: $88.1 million – 864 applicants
7. Idaho: $70 million – 316 applicants
8. Iowa: $51.1 million – 961 applicants
9. Texas: $49.8 million – 285 applicants
10. Ohio: $48.5 million – 906 applicants
11. Washington: $46.5 million – 265 applicants

Through Aug. 17, dairy represented less than19% of total CFAP payments. In addition to dairy, payments totaled $4.53 billion to livestock producers, $2.378 billion to producers of non-specialty crops and $425 million to producers of specialty crops. Overall, the USDA FSA had approved about $9.02 billion in payments to more than 541,073 agricultural producers.

Beginning this week, the FSA will automatically issue the remaining 20% of the calculated payment to eligible producers. Producers who received initial payments need not apply for the second installment.

The deadline to apply for CFAP payments has been extended to Sept. 11, 2020.

The USDA will host a producer webinar to discuss recent updates to CFAP, Aug. 19, 2 p.m. (Central time). The session will primarily discuss how CFAP works for eligible specialty crops and will share detailed examples of how to apply. Producers must register to participate in the webinar.

I-29 dairy webinar to feature Rabobank specialists

The I-29 Moo University Consortium will host a dairy outlook webinar on the domestic and international dairy markets, Aug. 25, at 12 p.m. (Central time). Rabobank’s Global Dairy Strategist Mary Ledman and Vice President of Dairy Research Ben Laine will discuss their outlook on the global and U.S. dairy markets.

There is no registration and participants can access the webinar here.

For more information, contact email Jim Salfer, Fred Hall, Tracey Erickson or Kim Clark.

I-29 Moo University is a consortium of extension dairy specialists from the land-grant universities in Iowa, Minnesota, Nebraska and South Dakota.

Pennsylvania CDE Dairy Financial and Risk Management Conference offered online

The Pennsylvania Center for Dairy Excellence’s (CDE) 11th annual Dairy Financial and Risk Management Conference, titled “Navigating the Numbers,” will now be held as a virtual event. The conference is scheduled for Sept. 15-16, 9-11:30 a.m. each day (Eastern time).

Click here to register for the virtual event, or email Heidi Zimmerman. Links to access the virtual conference will be provided after registration.

Reduced registration costs are available to dairy lenders, financial consultants and dairy farmers who sign up for the conference. Registration is $80 per person and discounted to $60 for representatives of organizations listed as the center’s Allies for Advancement.

This year’s event will provide dairy farmers and financial consultants with practical takeaways about market dynamics, risk management, insurance and change management, according to said Zach Myers, risk education program manager at the CDE. Dairy professionals who have experience in strategic management, dairy economics, agricultural insurance, benchmarking and business planning will speak in two sessions during the virtual event. The schedule follows:

Session 1: Tuesday, Sept. 15, 9-11:30 a.m.

  • “Understanding Insurance Options,” with Mark Goodhart, risk consultant and corporate vice president at Strickler Agency Inc.
  • “Dairy Producer Panel” with Mike Hosterman (AgChoice Farm Credit), Glenn Kline (Y-Run Farms LLC), Rodney Hissong (Mercer-Vu Farms Inc.) and Mark Mosemann (Misty Mountain Dairy LLC)

Session 2: Wednesday, September 16, 9-11:30 a.m.

  • “Market Dynamics” with Matthew Gould, president of Dairy and Food Market Analyst Inc.
  • “Change Management” with Dr. Jennifer Garrett, president and founder, JG Consulting Services LLC

USDA awards contracts to purchase 8 million RFID eartags

The USDA’s Animal and Plant Health Inspection Service (APHIS) awarded contracts to purchase up to 8 million low-frequency radio frequency identification (RFID) eartags in an effort to aid in animal disease traceability in cattle and bison. The contract allows APHIS to purchase additional tags each year for up to five years.

Contracts for the RFID tags were awarded to three American tag companies: Allflex, Datamars and Y-Tex. Contracting with all three manufacturers will allow the USDA to procure the number of tags needed to meet an industry volume equivalent to the number of replacement heifers in the U.S.

These RFID tags will be provided to animal health officials and will be distributed for use in replacement breeding cattle and bison at no cost to the producer. RFID low-frequency official calfhood vaccination (OCV) button tags are available for brucellosis-vaccinated animals, and official “840” white button tags are available for non-vaccinated heifers.

Free metal National Uniform Eartagging System tags will remain available as the USDA continues to receive comments and evaluate next steps on its proposed RFID transition timeline. The proposal is available for review and public comment through Oct. 5, 2020.

APHIS distributed more than 1.1 million RFID tags to 38 states between January and July 2020.

For more information on availability and distribution of tags, producers can contact their state veterinarian’s office. Producers can also purchase RFID tags for their animals by contacting any of the companies approved to manufacture official identification RFID tags.

Lawmakers urge USMCA dairy enforcement

A bipartisan coalition of 104 House lawmakers sent a letter urging the U.S. government to proactively enforce the U.S.-Mexico-Canada Agreement’s (USMCA) dairy-related provisions. The letter is supported by major U.S. dairy organizations.

Specific provisions of concern to the U.S. dairy industry highlighted in this letter include Canada’s administration of its dairy Tariff Rate Quotas (TRQ), the full and transparent elimination of Classes 6 and 7 and related dairy pricing program disciplines, and the enforcement of the side letter agreements with Mexico that protect market access for U.S. common names cheeses.

Leaders of U.S. dairy organizations said urgent enforcement is needed. According to the International Trade Commission, if USMCA is implemented as negotiated, U.S. dairy exports are projected to increase by more than $314 million a year.

“A strong demand for U.S. dairy exports abroad drives economic growth and creates jobs here at home. USMCA is designed to allow the U.S. industry to fulfill this demand from two of our largest dairy customers, and we cannot allow Canada or Mexico to undermine the important gains secured in this trade deal. We are working alongside Congress, the U.S. Trade Representative and the U.S. Department of Agriculture to ensure Canada and Mexico are held accountable to their trade commitments,” said Tom Vilsack, president and CEO of the U.S. Dairy Export Council.

“The support for today’s bipartisan letter demonstrates the incredible impact the U.S. dairy industry has across the country, supporting our rural economies and fulfilling an essential role in feeding America. USMCA is a modernized trade deal that represents new opportunities for our farmers and processors after years of rural recession and the new challenges presented by the current crisis. We must utilize USMCA’s enforcement mechanisms to bring home its hard-fought wins for America’s dairy farmers,” said Jim Mulhern, president and CEO of National Milk Producers Federation.  end mark

Dave Natzke