Digest Highlights

2019 CWT dairy exports near 1 billion pounds milk equivalent

Cooperatives Working Together (CWT) member cooperatives assisted in exporting dairy products equivalent to nearly 1 billion pounds of milk in 2019, according to the National Milk Producers Federation (NMPF).

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Dave Natzke
Editor / Progressive Dairy

Contracted sales under CWT in 2019 were estimated at 48.9 million pounds of American-type cheese, 123,458 pounds of anhydrous milkfat, 5 million pounds of butter (82% milkfat), 6.8 million pounds of cream cheese and 46.1 million pounds of whole milk powder. The products are equivalent of 956.3 million pounds of milk on a milkfat basis.

The amounts of dairy products and related milk volumes reflect current contracts for delivery, not completed export volumes. CWT pays export assistance to the bidders only when export and delivery of the product is verified by required documentation.

FDA seeks comments on use of UF milk in some cheeses

The U.S. Food and Drug Administration reopened the comment period on a proposed rule that would allow the use of fluid ultrafiltered (UF) milk in the manufacture of certain cheeses and related cheese products.

Ultrafiltered milk is raw or pasteurized milk that is mechanically filtered to concentrate the proteins in milk. In the process, some of the lactose, minerals and water-soluble vitamins are lost, along with water. The resulting protein concentrate is easier and more cost-effective to ship. This same process applies to UF nonfat milk, except that raw or pasteurized nonfat milk is used.

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The proposed rule, which was first issued in October 2005, would amend the definitions of “milk” and “nonfat milk” for cheeses and related cheese products in FDA’s regulations on food standards (often referred to as standards of identity).

In 2017, FDA issued guidance to the industry indicating that it is exercising enforcement discretion regarding the use and ingredient labeling of fluid UF milk and fluid UF nonfat milk in the manufacture of standardized cheeses and related cheese products while it considers rulemaking.

The FDA said the comment period was reopened to solicit any new information on current industry practices regarding the use of fluid UF milk and fluid UF nonfat milk and on labeling of fluid UF milk and fluid UF nonfat milk when used as ingredients. The 90-day comment period closes March 20, 2020.

Dairy Defined Podcast: NMPF’s Vitaliano discusses dairy’s recovery

Milk prices peaked in the fourth quarter of 2019 and ended the year in the strongest shape they’ve been in five years, said Peter Vitaliano, NMPF’s chief economist. That helped many producers achieve some level of recovery – or at least stop the economic bleeding.

After the fourth-quarter 2019 peak, the current outlook for 2020 prices is somewhat lower, but still is $1 higher than the full-year 2019 average of about $18.60 per cwt.

For a review of factors impacting 2019 and a look ahead into 2020, listen to the latest Dairy Defined Podcast.

Fluid Milk Processor Promotion Board nominees sought

The USDA is seeking candidates to serve on the National Fluid Milk Processor Promotion Board. Nominees must be active owners or employees of a fluid milk processor. The deadline for nominations is Jan. 13, 2020.

U.S. Secretary of Agriculture Sonny Perdue will appoint six individuals to succeed members whose terms expire on June 30, 2020, and one individual to fill a vacant position with a term expiring on June 30, 2022.

USDA will accept nominations for board representation in six geographic regions and one at-large position. The geographic regions with vacancies are: Region 2 (New Jersey and New York); Region 5 (Florida); Region 11 (Arkansas, Iowa, Kansas, Missouri, Nebraska and Oklahoma); Region 13 (Idaho, Montana, Oregon, Washington and Wyoming); and Region 14 (Northern California). Newly appointed members will serve three-year terms from July 1, 2020, through June 30, 2023. USDA will also accept nominations to fill a vacant position in Region 10 (Texas) to serve a two-year term expiring on June 30, 2022.

Fluid milk processors and interested parties may submit nominations for regions in which they are located or regions in which they market fluid milk, and for the at-large member.

For nominating forms and information, visit the AMS website or call (202) 720-5567.

Fluid Milk Processor Promotion Program activities are funded through a 20-cent-per-cwt assessment on fluid milk processed and marketed in consumer-type packages in the U.S.

California ‘quota’ meetings move to next phase

Efforts to resolve issues related to California’s “quota” program are moving to the next phase. Phase III meetings will be held at four California sites, Jan. 6-8. Advance registration is requested. Dates, times and locations include:

• Chino – Jan. 6, 2-4 p.m., Fairgrounds (Register)

• Tulare – Jan. 7, 9-11 a.m., Heritage Complex (Register)

• Turlock – Jan. 7, 2-4 p.m., Turlock Ballroom (Register)

• Petaluma – Jan. 8, 10 a.m.-noon, Washoe House (Register)

During the Phase III meetings, dairy producers will have an opportunity to narrow three proposed options down to one. Documents describing each option (Tying Quota Payments to Class I Sales, Sunset, Quota Buyout Plan) are now available on the United Dairy Families of California website.

Documents and videos providing historical background as well as Phase I and Phase II activities are available online.

2020 milk production forecast: Limited growth among major exporters

Major exporting countries/regions are expected to see limited growth in milk production in 2020, according to the USDA Foreign Agricultural Service. In its December 2019 “Dairy: World Markets and Trade report,” latest milk production estimates for major dairy exporters include:

  • Argentina: 10.8 million metric tons (MMT), up 1.5%, following a 1% decline in 2019.
  • Australia: 8.6 MMT, down 2% due to drought conditions and a 3% cut in the dairy herd.
  • European Union-28: 155.9 MMT, unchanged from 2019 due to drought-related forage shortages in the first half of the year. The milk herd is estimated to shrink, but milk per cow is anticipated to rise. Any additional milk will be channeled into cheese production.
  • New Zealand: 22 MMT, unchanged from 2019, which was expected to be down 1% from 2018.
  • U.S.: 100.9 MMT, up 2% from 2019.

Illinois dairy farmers could see breakeven in 2020

Higher milk prices in 2020 should push economic returns to Illinois dairy farms close to breakeven, according to a report from Bradley Zwilling, ag economist with the Illinois Farm Business Farm Management Association (FBFM) and University of Illinois.

The report, “Economic Review of Milk Costs in 2018 and Projections for the Rest of 2019 and 2020,” summarizes data from 17 dairy farms enrolled in FBFM. Based on the historical data, economic returns to FBFM farms has been below breakeven every year since 2015.

The USDA forecasts milk prices are projected to increase 4% in 2020. The average milk price for 2019 is projected at $18.70 per cwt; total economic costs to produce it are expected to average $19.63 per cwt, resulting in returns 93 cents per cwt below total economic costs to produce it.

Complete-year Illinois data showed negative economic returns for Illinois dairy producers continued in in 2018. The milk price averaged $16.48 per cwt, well below total economic costs of $19.72 per cwt. On a per-cow basis, total returns from milk were $3,913 compared to the total cost to produce milk of $4,660 per cow. The net returns per cow in 2018 were a negative $747, the lowest since 2012.

New ‘Destination Dairy’ exhibit hall planned at Pennsylvania Farm Show

A new “Destination Dairy” Northeast Hall will be unveiled during the 2020 Pennsylvania Farm Show, featuring hands-on learning stations highlighting the entire process milk follows from the dairy farm to the grocery store. The Pennsylvania Farm Show is Jan. 4-11, 2020, in Harrisburg, Pennsylvania.

Destination Dairy will feature interactive, family-friendly learning stations, including activities centered around dairy nutrition, animal care, shopping locally and more. Families can participate in dairy trivia and enjoy skits and stories told by Pennsylvania dairy princesses.

The “Calving Corner” will be featured as the cornerstone exhibit, giving visitors the opportunity to witness the dairy birthing process, according to Miriam Miller, project manager. Pennsylvania farms providing cows that will calve during the show include: Yippee! Farms owned by Arlin and Deborah Benner of Mount Joy; Meadow Spring Farm owned by Tom and Andy Bollinger of Lititz; Meadow Wood Farms owned by Dave, Bob and Tom Bomberger of Lebanon; and Franklin View Farms owned by Jim, Nelson and Aaron Breneman of Washington Boro.

Pennsylvania is home to 6,200 dairy farm families, nearly 40 dairy processing companies and a wide array of small-scale dairy creameries and artisan cheese makers.  end mark

PHOTO: A new “Destination Dairy” Northeast Hall will be unveiled during the 2020 Pennsylvania Farm Show, Jan. 4-11, 2020, in Harrisburg, Pennsylvania. In addition to the popular “Calving Corner,” Destination Dairy will feature interactive, family-friendly learning stations, including activities centered around dairy nutrition, animal care, shopping locally and more. Photo courtesy of Center for Dairy Excellence.

Dave Natzke