Digest Highlights

Dairy-RP weekend sales periods modified

The USDA’s Risk Management Agency (RMA) is modifying the Dairy Revenue Protection (Dairy-RP) program weekend sales period because of the high volatility of milk prices. The move will require Dairy-RP sales agents to complete transactions on Sunday morning instead of waiting until Monday.

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Dave Natzke
Editor / Progressive Dairy

Starting Friday, June 5, the sales period will begin no later than 4:30 p.m. (Central time) when the coverage prices and rates are published and will end at 9 a.m. (Central time) of the following business day or Sunday, whichever is earlier.

The next sales period will begin no later than 4:30 p.m. (Central time) on the following business day.

This change only impacts when milk producers can purchase Dairy-RP quarterly endorsements, not the timing of indemnity payments. This modification will also be incorporated into the Dairy-RP policy for the 2022 crop year.

Dairy-RP is designed to insure for unexpected declines in the quarterly revenue from milk sales compared with a guaranteed coverage level. The expected revenue is based on futures prices for milk and dairy commodities and the amount of covered milk production elected by the dairy producer. The covered milk production is indexed to the state or region where the dairy producer is located.

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To date, dairy producers have purchased $11.9 billion in Dairy-RP coverage for 2020, with premiums totaling $145.9 million. Total current Dairy-RP purchases represent over 25% of the milk likely to be produced in the U.S. in 2020.

For more information about Dairy-RP, visit RMA’s website or contact your local crop insurance agent using the RMA agent locator.

Global Dairy Trade index holds

The index of Global Dairy Trade (GDT) dairy product prices rose 0.1% in the latest auction held June 2, with the price for whole milk powder offsetting declines for most other products. A price summary of individual product categories follows:

  • Skim milk powder was down 0.5% to $2,530 per metric ton (MT).
  • Butter was down 4.4% to $3,631 per MT.
  • Whole milk powder was up 2.1% to $2,761 per MT.
  • Cheddar cheese was down 5.3% to $3,520 per MT.

The next GDT auction is June 16.

USDA dairy trade forecast revised higher

Coronavirus-induced global economic pressures will mean a reduction in U.S. agricultural trade, according to the USDA’s quarterly Outlook for U.S. Agricultural Trade report, released May 29.

The forecast for overall U.S. ag exports in fiscal year 2020 (FY 2020, Oct. 1, 2019-Sept. 30, 2021) was cut by $3 billion from the February outlook to $136.5 billion. The estimate of U.S. ag imports was also reduced, down about $2.3 billion from February to $130.2 billion.

In contrast to the decline in overall ag exports, the USDA estimated fiscal year 2020 dairy exports at $6.2 billion, up about $200 million from February’s forecast. U.S. dairy export volumes, particularly for dry milk powder, are expected to grow.

The USDA also raised the FY 2020 U.S. dairy import forecast to $3.7 billion, up $100 million from the February outlook. Estimated FY 2020 cheese imports at $1.3 billion were unchanged.

The USDA’s April 2020 U.S. ag export data will be released June 4-5.

NMPF: Dairy is resilient

At a time when people are relying more on grocers to fill their food needs, they’re relying on dairy significantly more than they are on other products, according to the National Milk Producers Federation (NMPF). Retail sales as reported by consumer market researcher IRI over the past three months show that consumers have reacted to the coronavirus crisis first by stocking up on dairy, then by continuing to buy milk and other products at disproportionately high levels.

From March 8 to March 22, fluid milk sales were 43% higher than during the same period a year earlier. Yogurt rose 31%, ice cream sales gained 40%, and cheese sales rose 76%. Butter sales more than doubled during the same period.

The gains have continued. Retail dairy sales from late March through May 17 remained 25% higher than a year ago, while overall grocery sales during that same period were only up 14%.

Pre-coronavirus, about half of all dairy sales came from outside the home. Even as retail consumers increased dairy buying, sales to restaurants, schools and cafeterias plunged. That turbulence prompted sharp declines in the USDA’s forecast for milk prices for 2020. That’s been a big reason why federal assistance for dairy farms has been so important.

But even that story is brightening. A recent price rally is changing the outlook from mortifying to merely difficult – still cold comfort for many producers, but more manageable in a way many wouldn’t have dared to wish for even one month ago. Restaurant sales are slowly returning, and federal aid has provided a meaningful boost to bottom lines, even as signs of stress will still need to be monitored and additional aid will be necessary.

For more information, click here.

Pennsylvania CDE to host CFAP sign-up webinar

Pennsylvania’s Center for Dairy Excellence (CDE) is offering a free webinar to help producers apply for direct financial relief through the Coronavirus Food Assistance Program (CFAP). The webinar, titled “A step-by-step guide to submitting CFAP applications,” is scheduled for June 12, 8 to 9 a.m. (Eastern time) and is designed for dairy producers and consultants. The event is free, but advanced registration is required.

Hosted by Zach Myers, rsk education manager at the CDE, the webinar will help dairy producers and consultants understand the CFAP application steps, how to calculate payments and how to submit dairy applications through Farm Service Agency offices. Myers will clarify common areas of confusion and explain how consultants can help dairy producers find the appropriate data for their farm and calculate total inventories.

Advance registrants will receive an access code to participate. A recording of the presentation will also be sent to participants at the conclusion of the event.

USDA allows extensions on insurance deadlines, deferral of interest

USDA’s Risk Management Agency (RMA) is authorizing approved insurance providers (AIPs) to extend the deadlines for up to 60 days on policyholders’ payment of premiums and administrative fees, to defer the resulting accrual of interest and to extend the correction time period for acreage reports or other forms up to 30 days.

RMA staff are working with AIPs and other customers by phone, mail and electronically to continue supporting crop insurance coverage for producers. Farmers with crop insurance questions or needs should continue to contact their insurance agents about conducting business remotely (by telephone or email).

DMI launches monthlong dairy celebration

In celebration of National Dairy Month, Dairy Management Inc. (DMI) and state and regional checkoff teams around the country are showcasing dairy’s resilience and community impact during the COVID-19 pandemic.

The efforts began on June 1 – World Milk Day – with a “Raising Gallons” video featuring Olympians, NFL players, famous chefs and others raising a gallon of milk to show their appreciation for dairy farmers while supporting the checkoff’s goal of getting nutritious dairy to food-insecure Americans through its Feeding America partnership.

The video is kicked off by Pennsylvania dairy farmer and DMI Chair Marilyn Hershey and concludes with Feeding America’s Director of Dairy Supply Chain Partnerships Jerod Matthews, who encourages consumers to post their own “raising gallons” photo using #UndeniablyDairy.

MilkPEP will match donations to its GiveAGallon campaign, up to $100,000.

Additional checkoff-led efforts nationally and locally will promote “30 days of dairy” throughout June. Each day of the month will be filled with virtual farm tours and content that celebrates the role dairy plays in people’s lives while illustrating dairy farmers’ resilience and contributions to their communities, tagged with a newly created “30 days of dairy” badge.

The checkoff also will promote dairy-centric recipes for summer, with stay-at-home cooking expected to continue as a major activity for many families. Content will be published on DMI’s website, as well as through state and regional organizations.  end mark

Dave Natzke