Digest highlights

April Class IV milk price tops $25

The April Federal Milk Marketing Order (FMMO) Class IV milk price set another record high in April, with the Class III milk price not far behind.

Natzke dave
Dave Natzke
Editor / Progressive Dairy

At $25.31 per hundredweight (cwt), the April 2022 Class IV milk price rose 49 cents from March and is $9.89 more than April 2021. The Class IV milk price has averaged $24.31 per cwt through the first four months of 2022, up $10.17 from the same period a year ago and also a record high.

The April 2022 Class III milk price rose $1.97 from March to $24.42 per cwt, the highest since September 2014. The Class III price is up $6.75 from April 2021.

At $25.71, the Class II milk price surpassed both Class III and Class IV prices, up 95 cents from March and $10.15 more than April 2021.

April Class III-IV milk prices again moved higher due to increases in values of butterfat, protein and nonfat solids used in monthly milk price calculations.

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The value of butterfat rose more than 5 cents from March to almost $3.15 per pound. The value of milk protein jumped more than 70 cents to $3.42 per pound. The value of nonfat solids rose more than 3.5 cents to $1.65 per pound. The value of other solids decreased about 5.5 cents to 55.7 cents per pound.

The April Class III-IV price spread slipped to just 89 cents per cwt, sharply cutting into incentives for Class IV depooling.

FMMO administrators are scheduled to announce April uniform prices, producer price differentials and pooling volumes by May 14.

Senate kicks off 2023 Farm Bill field hearings

Michigan dairy farmer Ashley Kennedy presented testimony during the Senate Ag Committee’s first field hearing on the 2023 Farm Bill, April 29, in East Lansing, Michigan.

Kennedy, whose family milks 240 cows in east-central Michigan, presented oral and written remarks on behalf of the Michigan Milk Producers Association (MMPA) and the National Milk Producers Federation (NMPF).

Kennedy’s oral testimony can be viewed in an archived video of the hearing (beginning at about 45:15).

As part of her statements, Kennedy urged ag committee members to include Dairy Margin Coverage (DMC) milk production milk history adjustments, retroactively implemented to cover 2021 and set to expire at the end of 2023, to be carried over into the next farm bill.

Citing the combined impact of USDA cheese purchases during the COVID-19 pandemic and the negative impact of changes to the Class I mover pricing formula, Kennedy said the events of the last two years have put a spotlight on the need for an overall update to the FMMO system. As a result of Class I mover changes, Class I skim milk prices during the second half of 2020 averaged $3.56 per cwt lower than they would have under the previous mover, creating a net loss to dairy producers of more than $750 million over that period. That included over $117 million in net losses in the Mideast FMMO, which includes Michigan.

Beyond risk management and milk pricing policies, Kennedy also advocated for additional investments in conservation programs, urged a doubling of funding for key trade promotion programs and spoke to the importance of farm bill nutrition programs. She closed by urging lawmakers to provide robust resources to address the need for significant mental health policy in the farm bill.

The Michigan field hearing was held in the home state of U.S. Sen. Debbie Stabenow (D-Michigan), committee chair. The committee is expected to hold an additional field hearing in the coming weeks in Arkansas, the home state of Sen. John Boozman, ranking Republican member.

Calgren Dairy Fuels receives California Dairy Sustainability Award

The California Milk Advisory Board (CMAB) named Calgren Dairy Fuels LLC the winner of its second California Dairy Sustainability Award. Calgren’s partnership with Maas Energy Works Inc. created a dairy digester pipeline cluster to efficiently collect dairy biogas from California dairy farm partners and upgrade and inject it into a utility pipeline owned by Southern California Gas Company (SoCalGas).

Calgren Dairy Fuels’ 22-plus miles of underground pipeline link 12 dairies that send biogas from on-farm digesters – and two additional dairies that haul biomethane via tube trailers – to its centralized conditioning facility in Pixley, California. An additional dairy supplies manure slurry to a digester at the Calgren conditioning facility for biogas production. After upgrading the dairy biogas, Calgren injects it into a utility pipeline owned by SoCalGas. This dairy-sourced renewable compressed natural gas (R-CNG) is made available as fuel for heavy duty trucks, replacing 3 million gallons of existing fossil-fuel diesel with near zero emissions from CNG engines.

Each year, 150,000 tons of greenhouse gasses are captured from more than 70,000 cows and heifers. Additionally, more than 75 full-time equivalent jobs have been supported, and more than 18 miles of additional pipeline are under construction to double the number of dairies in the cluster.

The award was presented by CMAB during the third California Dairy Sustainability Summit, in partnership with the California Dairy Research Foundation (CDRF) and California Dairy Quality Assurance Program (CDQAP).

The project was previously featured in Progressive Dairy as recipient of a U.S. Innovation Center for Dairy Sustainability award. Read: Generating measurable sustainability results locally, globally.

Planting progress continues to lag

It’s probably too early to worry, but the slow start to the 2022 planting season has some producers and advisers previewing options concerning planting dates and “prevented planting” crop insurance.

Read: "Review of prevented plant decisions for 2022,” authored by University of Illinois economists Gary Schnitkey, Krista Swanson, Nick Paulson and Jim Baltz, and Ohio State University economist Carl Zulauf.

As of May 1, the USDA estimated about 14% of 2022 intended corn acreage was planted across the U.S., less than half the five-year average of 33% for the same date.

In many Corn Belt states, corn planting is even further behind. In Illinois, just 7% of the 2022 intended corn acreage had been planted as of May 1, down from the five-year average of 43%. In Indiana, 6% was planted, compared to the 2017-21 average of 25%. In Iowa, 9% of 2022 corn acreage was planted, compared to the five-year average of 42%. In Wisconsin, 1% of this year’s corn crop was planted, compared to a five-year average of 14%. In Minnesota, 0% of this year’s corn crop was planted, compared to a five-year average of 28%.

In most of those states, planting progress is matching the pace in 2019, when many acres did not get planted. It is still early, and the economists note planting can progress quickly with suitable fieldwork days. For example, Illinois producers can plant the entire corn crop in about 14 suitable field days.

What also sets the 2022 situation apart from 2019 are market signals. If harvest-time bids do not decline, planting corn late is projected to have higher expected returns than taking prevented plant payments.

Prevented planting payments can be claimed once “final planting dates” are reached. Final planting dates for grain corn vary across Midwestern states. May 31 is the final planting date for Iowa, southern Minnesota and Wisconsin, northeastern Missouri, the extreme southern counties of Illinois and Kentucky. June 5 is the date for most of Illinois, Indiana, Ohio and Michigan.

OMB reviewing FDA’s draft guidance on plant-based dairy alternative labeling

According to the Penn State Agricultural Law Weekly Review, the U.S. Office of Management and Budget (OMB) is reviewing FDA draft guidance covering the labeling of plant-based milk alternatives.

In September 2018, FDA requested comments regarding the agency’s approach on plant-based product labeling and dairy food names. The request called for information on how consumers understand terms like “milk,” “cultured milk,” “yogurt” and “cheese” when used on plant-based product labels and how consumers use plant-based products with dairy names. The comment request also sought to discover whether consumers understood and were aware of differences in the “basic nature, characteristics, ingredients and nutritional content” of dairy products and plant-based products using dairy names. More than 12,000 comments were received.

The OMB website lists three upcoming meetings regarding FDA’s submitted draft guidance: on May 5, 2022, requested by the Plant Based Foods Association; on May 16, 2022, requested by the National Milk Producers Federation; and on May 23, requested by The Good Food Institute.

White House plans ‘hunger, nutrition and health’ conference in September

For the first time in over 50 years, the White House will host a Conference on Hunger, Nutrition and Health this September. Listening sessions will be held leading up to the conference. No specific dates have yet been announced.

Citing the key nutritional benefits of dairy, Jim Mulhern, president and CEO of NMPF, said the organization looked forward to participating in the conference, “to advance the goals of ending hunger, increasing healthy eating and physical activity, and decreasing the prevalence of diet-related diseases across our nation. NMPF looks forward to working with the White House and both public and private partners toward advancing these incredibly important goals as we work to ensure all Americans have access to healthy food.”

USDA proposes rule regarding the Livestock Dealer Statutory Trust

The USDA published a notice proposing revisions to regulations under the Packers and Stockyards Act (PSA). The revisions implement the Livestock Dealer Statutory Trust, which provides financial protection for cash sellers of livestock.

Congress amended the PSA in late 2020, providing for a statutory trust covering livestock purchases by dealers. Dealers whose average annual livestock purchases exceed $100,000 are required to hold all livestock purchased, and if livestock has been resold, the receivables or proceeds from such sale, in trust for the benefit of all unpaid cash sellers of livestock until full payment has been received by those sellers. The proposed regulations would add procedures and time frames for a livestock seller to notify the livestock dealer and the USDA that the seller has not received full payment for livestock purchased by the dealer and that the seller intends to preserve their trust interests. In addition, livestock dealers would be required to obtain written acknowledgement from livestock sellers that trust benefits do not pertain to credit sales and would be required to maintain records related to credit sales.

USDA’s Agricultural Marketing Service, which administers and enforces the PSA through its Packers and Stockyards Division, is accepting comments on the proposed rule until June 6 and until July 5, 2022, on the information collection burden.