Digest Highlights

Dairy meetings canceled due to coronavirus concerns

Fears related to the coronavirus are not only impacting dairy markets and exports, but also forcing the cancellation of several large dairy meetings.

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Dave Natzke
Editor / Progressive Dairy
  • Cornell University has postponed the Northeast Dairy Management Conference, set for March 11 -12 in Liverpool, New York. Options to reschedule the event are being explored.

  • Dairy Farmers of America (DFA), the nation’s largest dairy cooperative, has postponed its annual meeting, scheduled for March 16-18 in Kansas City, Missouri. In accordance with DFA bylaws, a meeting of DFA’s delegates and farmer-leaders is being planned for later this year.

  • An annual “Workshop for Dairy Economists and Policy Analysts,” originally set for April 22-23 in Baltimore, Maryland, will not be held.

  • CME Group announced it will close its Chicago trading floor as of the close of business on Friday, March 13, as a precaution to reduce large gatherings that can contribute to the spread of coronavirus. All products will continue to trade on the CME Globex electronic trading system. While no coronavirus cases have been reported on the trading floor or in the Chicago Board of Trade building, the reopening of the trading floor will be evaluated as more medical guidance becomes available. Additional details related to procedures and protocols will be provided to floor traders.

NFU calls for dairy policy reforms with eye on supply

Delegates attending the National Farmers Union (NFU) 118th Anniversary Convention adopted the organization’s policy book and special orders of business, including one calling for reforms to federal dairy policies.

Citing overproduction of milk and instability in milk prices, the special order regarding dairy noted failed federal policies resulted in roughly 7,500 U.S. dairy farms going out of business between 2014 and 2018. While recognizing improvements to the USDA’s Dairy Margin Coverage (DMC) program, NFU delegates called for a mandatory mechanism to manage milk supply to meet profitable demand.

According to the special order, such a program should increase farmer profitability by: elevating milk prices, preventing overproduction and reducing milk price volatility. The program should also: allow for beginning farmer entry; reduce government expenditures; respond to global market conditions; be national and mandatory so that all dairy producers participate; allow for on-farm processing, value-added and direct-to-consumer sales; allow for planned growth in response to profitable market demand; be designed in such a way that any production base does not acquire value; and have meaningful farmer input in development, implementation and governance.

Delegates also elected Rob Larew to succeed Roger Johnson as the organization’s president. Larew, who was raised on a West Virginia dairy farm, served as NFU’s senior vice president of public policy and communications since fall 2016. He previously served within the USDA and Congress, most recently as the staff director of the House Committee on Agriculture.

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Patty Edelburg, a dairy farmer from Scandinavia, Wisconsin, was re-elected to serve as NFU vice president.

February Class III price down a nickel

The February 2020 Federal Milk Marketing Order (FMMO) Class III milk price continued to descend from the 60-month high set last November. At $17 per hundredweight (cwt), the Class III milk price was down 5 cents from January but still $3.11 more than February 2019.

The February 2020 Class IV milk price dipped 45 cents from January to $16.20 per cwt but was 34 cents more than February 2019.

Both February 2020 Class III and Class IV prices were the highest for the month since 2014.

The 2019 Class III averaged $16.96 per cwt; the 2019 Class IV milk price averaged $16.30 per cwt.

Dairy margins continue to face headwinds

Dairy margins continued to weaken over the second half of February as the milk market remained under pressure despite generally steady feed costs, according to Commodity & Ingredient Hedging LLC.

Although margins have retreated from very profitable levels, they remain relatively strong from a historical perspective. Ongoing headwinds from the expanding global coronavirus outbreak have pressured milk prices as rising production and stocks raise concern over near and medium-term demand.

Vermont value-added workshop planned

The Vermont Agency of Agriculture will host a dairy business visioning and planning event, May 13-14, at the University of Vermont Extension office in Berlin, Vermont. The program is free for farmers, but enrollment is limited to 30, with no more than two people from each farm business.

This workshop is designed to give Vermont dairy farmers tools to plan the future of their dairy operations. The program will be particularly useful to anyone who is contemplating a production strategy change, starting to add value to their own milk or increasing their current value-added production.

Julia Shanks, author of The Farmer’s Office, and Noah Munro of Kitchen Table Consultants will facilitate the workshop. A series of exercises will help participants understand current farm finances and evaluate, plan and create an implementation map for potential new enterprises.

Application information will be available on the Vermont Agency of Agriculture webpage.

Trickling Springs Creamery owner pleads guilty to federal fraud charges

Philip Elvin Riehl, majority owner of Trickling Springs Creamery LLC, will be sentenced in June following a guilty plea to three federal criminal felony fraud charges.

According to the U.S. attorney’s announcement, Riehl fraudulently solicited tens of millions of dollars in investments from his accounting clients and others who are mostly Mennonite or Amish into an investment program that he operated. Riehl then diverted funds from the program to Trickling Springs Creamery LLC, a Franklin County–based creamery of which he was the majority owner. Riehl also fraudulently solicited direct investments in Trickling Springs Creamery.

According to the agreement, the maximum jail term is 45 years and forfeiture of all Riehl’s assets, in the amount of about $59.7 million, to satisfy restitution. Riehl was released on $250,000 bond pending sentencing scheduled for June 5, 2020.

Georgia dairy producers eligible for Hurricane Michael recovery funds

Georgia dairy farmers in 95 counties who suffered losses due to Hurricane Michael may be eligible for funds through a Georgia Farm Recovery Block Grant.

The Georgia Department of Agriculture (GDA) will accept online applications for the $347 million in block grant funds. Producers who suffered losses to beef, dairy, fruit and vegetable, pecan, poultry, timber and uninsured infrastructure may enroll. The federal block grants seek to help recover losses not covered under existing USDA Farm Service Agency programs.

Dairy losses covered include increased mortality and disease and declines in conception and milk production.

Only online applications will be accepted. While mobile phones may be used to sign up and log in, applicants are encouraged to complete the application using a computer to ensure proper upload and attachment of required documents.

Applications will be accepted March 18-April 8.

For questions regarding the Farm Recovery Block Grant, email GDA.

‘Livestock mortality composting’ insights sought

The American Society of Agricultural and Biological Engineers (ASABE) is initiating a project to revise standards related to animal mortality. To ensure the document reflects the needs and practices of the end user, the project committee is seeking participants who have on-farm involvement with livestock composting.

ANSI/ASABE EP585 was adopted in 2015 and provides guidelines for biosecure, environmentally acceptable and economically sustainable disposal of livestock and poultry carcasses.

ASABE is an international scientific and educational organization dedicated to the advancement of engineering applicable to agricultural, food and biological systems. Those interested in participating can learn more by emailing Standards Administrator Jean Walsh.

Wisconsin creates water quality credit clearinghouse

A new Wisconsin law creates a streamlined process for trading water quality credits.

Signed by Gov. Tony Evers, the law creates a “clean water clearinghouse” to make it easier for farmers who are reducing the runoff of nutrients such as phosphorous to trade with municipalities and manufacturers that surpass the allowable limit in their discharges.

While Wisconsin law already allows for this type of trading, it has been used relatively little. A centralized third-party system will likely make the trading more popular, according to Tom Crave, president of the Dairy Business Association and a farmer and cheesemaker in south-central Wisconsin.

The clearinghouse approach for water quality credit trading will function something like existing markets for carbon credits. Various entities, including local water treatment facilities, cheese plants and other factories are required to meet limits for what pollutants or nutrients they can discharge to the environment.

At the same time, there are environmental and farming organizations that are implementing innovative farming techniques or land-use changes that reduce the amount of phosphorus in a watershed. Now, organizations doing that kind of work could sell credits from the phosphorus reductions they achieve, and other entities could buy them to offset the amount of phosphorus they need to remove from their waste.

“This is a win-win-win for Wisconsin,” Crave said. “Residents and customers won’t have to bear the full cost of updating wastewater treatment plants and other industrial facilities, our farmers will have a new revenue stream to offset some of the costs of their innovative efforts and our water will be clean. That’s the ultimate goal.”  end mark

Dave Natzke