Digest highlights

Natzke dave
Dave Natzke
Editor / Progressive Dairy

Bel Brands USA, DFA sustainability partnership expanding

Following first-year success, Bel Brands USA and Dairy Farmers of America (DFA) are extending a partnership designed to invest in innovative new ways to improve on-farm sustainability practices and reduce farms’ environmental footprints.

Last year, Bel Brands and DFA partnered to support the adoption of energy-efficient and cost-effective on-farm milk cooling methods. This included new natural well water and forced air barn cooling systems installed on a DFA member dairy farm in Iowa that supplies milk to Bel Brands.

Over the 12 months, the use of the cooling methods resulted in a 6% reduction in electricity used on the dairy, while milk production increased 4%. Moreover, the addition of new sand bedding reduced tractor usage, cutting greenhouse gas emissions (GHG) by 58 tons (carbon dioxide equivalent).

Building on the effort, Bel and DFA are extending the partnership to a new program intent on supporting the next generation of U.S. dairy farmers. Under the new pilot, Bel will supply a small DFA member dairy farm in South Dakota with equipment normally thought only to be useful on a larger dairy, testing the viability of the equipment to promote cost-effective and sustainable practices that can be replicated on other U.S. dairy farms in the future.

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GDT price index declines again

The latest Global Dairy Trade (GDT) auction saw the overall price index decline 5%, marking the eighth decline in the last nine auctions. Prices in all individual product categories were lower in the July 19 auction, including:

  • Skim milk powder was down 8.6% to $3,709 per metric ton (MT, or about 2,205 pounds).
  • Whole milk powder was down 5.1% to $3,757 per MT.
  • Butter was down 2.1% to $5,530 per MT.
  • Cheddar cheese was down 2% to $4,825 per MT.
  • Anhydrous milkfat was down 2.1% to $5,580 per MT.

The GDT platform offers dairy products from six global companies: Fonterra (New Zealand), Dairy America (U.S.), Amul (India), Arla (Denmark), Arla Foods Ingredients (Denmark) and Polish Dairy (Poland). The next GDT auction is Aug. 2.

May fluid sales lower

Here’s an update on U.S. fluid milk sales data from the USDA Agricultural Marketing Service for May 2022.

  • Total sales: Sales of packaged fluid milk products totaled about 3.58 billion pounds, down about 1.7% from the same month a year earlier. At 18.29 billion pounds, year-to-date (January-May 2022) sales of all fluid products were down 2.4%.
  • Conventional products: Monthly sales totaled 3.33 billion pounds, down 2.1% from the same month a year earlier. Year-to-date sales totaled 17.08 billion pounds, down 2.3% from January-May 2021.
  • Organic products: Monthly sales totaled 244 million pounds, up 4.4% from a year earlier. At 1.21 billion pounds, year-to-date sales of all fluid products were down 2.6%. Organic represented about 6.8% total fluid product sales in May and 6.6% year to date.

The U.S. figures are based on consumption of fluid milk products in Federal Marketing Milk Order (FMMO) areas, which account for approximately 92% of total U.S. fluid milk sales, and adding the other 8% from outside FMMO-regulated areas. Sales outlets include food stores, convenience stores, warehouse stores/wholesale clubs, nonfood stores, schools, the food service industry and home delivery.

Dairy Together podcast addresses policy changes

Wisconsin Farmers Union and Dairy Together have created a new podcast series discussing potential dairy policy reforms under the 2023 Farm Bill, including the establishment of a mandatory program for managed growth based on market demand and price stability.

The series, featuring co-hosts Danielle Endvick and Bobbi Wilson, currently includes two episodes: “Unity and the Path to the Farm Bill” and “The Dairy Revitalization Plan.” The discussion is based on a study, “Analyses of Proposed Alternative Growth Management Programs for the U.S. Dairy Industry,” conducted by dairy economists Charles Nicholson and Mark Stephenson.

The Dairy Together podcast is free and available for download here.

NMPF supports temporary import tariff waiver on infant formula

The National Milk Producers Federation (NMPF) said it supports bipartisan House legislation that would encourage additional infant formula supply imports as a temporary way to ease short-term supply shortfalls in the U.S. market. NMPF emphasized, however, that boosting longer-term domestic production to ensure safe, secure infant formula supplies in the future is needed.

The “Formula Act,” H.R. 8351, would waive U.S. tariffs on infant formula imports through the end of 2022 to ensure that the domestic market has the supplies of formula it needs as it recovers from an acute processing capacity crisis that’s created nationwide infant formula shortages.

The bill passed the House by a 421-2 vote, July 15, and now moves to the Senate.

“In addition to advancing the Formula Act, Congress and the Biden administration should work together with the U.S. dairy and formula industries to explore what additional domestic policy reforms are needed to further expand U.S. infant formula production capacity so that this country can create the most reliable supply base for this important product.,” said Jim Mulhern, president and CEO of NMPF.

CoBank: Economic clouds gather

High feed costs, extremely tight heifer inventories and high construction costs continue to limit U.S. milk production expansion potential, according to Tanner Ehmke, lead dairy and specialty crop economist with CoBank.

Although feed costs eased at the end of the quarter, only incremental increases in cow numbers and milk collections are expected for the remainder of 2022, Ehmke noted in the latest a new quarterly report from CoBank’s Knowledge Exchange. Profitability has been strong for dairy operations that secured or hedged feed early. New dairy barn construction is underway in some regions, notably in areas where plant expansions have been announced.

To read more on interest rates, feed and fuel prices, find CoBank’s quarterly report here.

The USDA releases preliminary June milk production estimates on July 21. Check back with Progressive Dairy for a summary.