Digest Highlights

2021 DMC premium payment deadline is approaching

The deadline to pay premiums for producers participating in the calendar year 2021 Dairy Margin Coverage (DMC) program is approaching. Beginning Sept. 1, local USDA Farm Service Agency (FSA) offices will begin contacting producers regarding any outstanding premium payments due before Oct. 1. If not paid, outstanding premiums will be deducted from future indemnity payments.

Natzke dave
Dave Natzke
Editor / Progressive Dairy

Producers with unpaid premiums for calendar year 2021 will not be approved for calendar year 2022 DMC participation until premium fees have been paid in full. Contact your local FSA office for more information.

Milk and feed price factors used to calculate July 2021 DMC program margin and potential indemnity payments will be released by the USDA on Aug. 31. The DMC Decision Tool estimates an all-milk price under $21.68 per hundredweight (cwt) would trigger indemnity payments for July milk, based on milk and feedstuff futures prices calculated at the close of trading on Aug. 24.

Dairy cull cow slaughter picks up pace

The USDA’s weekly and monthly Livestock Slaughter reports indicate dairy cull cow slaughter has picked up the pace this summer.

According to the weekly summary, dairy cull cow slaughter at federally inspected plants was higher than the corresponding week a year earlier for nine consecutive weeks, June 12-Aug. 7. During that period, slaughter was about 37,000 more than a year earlier. After trending lower through most of the first half of 2021, year-to-date 2021 slaughter (as of Aug. 7) was estimated at just under 1.92 million head, up about 15,000 head from the same period a year earlier.

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On a monthly basis, July slaughter was estimated at 247,900 head, up about 12,400 head from June 2021 and 14,200 more than July 2020. Through the first seven months of 2021, dairy cull cow slaughter was estimated at 1.811 million, about 14,900 head less than the same period a year earlier despite a substantially larger dairy herd.

Heaviest dairy culling during July 2021 occurred in the Upper Midwest (Illinois, Indiana, Michigan, Minnesota, Ohio and Wisconsin) at 61,000 head. That was followed by the Southwest (Arizona, California, Hawaii and Nevada), where 59,000 dairy cows were removed. Other regional totals were estimated at 38,000 head in Delaware, Maryland, Pennsylvania, West Virginia and Virginia; 25,300 head in Alaska, Idaho, Oregon and Washington; and about 30,000 head in Arkansas, Louisiana, New Mexico, Oklahoma and Texas.

During January-July 2021, 433,800 head were culled for slaughter from herds in the Upper Midwest, followed by 430,600 head from herds in the Southwest.

USDA accepts bids for 2.3 million pounds of cheese

The USDA awarded bids for delivery of dairy products for domestic feeding programs in the final quarter of 2021 to:

  • Gossner Foods, Logan, Utah, for 392,940 pounds of sliced and block Swiss cheese
  • Great Lakes Cheese, Hiram, Ohio, for 1.319 million pounds of chunk and shredded cheddar cheese
  • Miceli Dairy Products, Cleveland, Ohio, for 33,600 pounds of shredded cheddar cheese and 226,800 pounds of mozzarella string cheese
  • Winona Foods, Green Bay, Wisconsin, for 347,490 pounds of sliced Swiss cheese

Chapter 12 bankruptcy filings were lower

Despite an incredibly challenging 18 months, Chapter 12 bankruptcy filings by U.S. farms during June 2020-21 were down 24% compared to the same period a year earlier, according to the latest analysis filing data from the American Farm Bureau Federation (AFBF). Chapter 12 filings during the 12-month period totaled 438, the lowest total since 2015, said Veronica Nigh, AFBF senior economist.

The ongoing impact of the severe drought was evident in the number of Chapter 12 bankruptcies. Filings were up in Colorado, Oklahoma, New Mexico and California. Overall, filings were up 13% in the West and 41% in the Southwest. Filings were also up 12% in the Northeast.

Other parts of countries had better news. Compared to a year earlier, filings were down 44% in the Southeast, 54% in the Northwest and 38% in the Mid-Atlantic. The Midwest, which still leads all regions in the number of filings with 235, had 61 fewer Chapter 12 bankruptcies in the past year, down 21% from the year before.

Things you might have missed

  • The EPA and Army Corps of Engineers is accepting comments, until Sept. 3, on its intent to revise the Waters of the U.S. (WOTUS) rule. In early August, the EPA announced a two-step plan that will (1) restore Waters of the U.S. to pre-2015 conditions with modifications relevant to Supreme Court decisions and (2) create additional regulations. The Waters of the U.S. rule was revised through the Navigable Waters Protection Rule, implemented in 2020 by the Trump administration.

  • The USDA is expanding Supplemental Nutrition Assistance Program (SNAP) benefits for fiscal year 2022, beginning Oct. 1, 2021. Average SNAP benefits under the Thrifty Food Plan will increase by $36.24 per person per month, or $1.19 per day. The revision is expected to boost dairy sales, especially fluid milk and cheese.

  • In early August, the U.S. District Court for the Northern District of California issued an order granting summary judgment in favor of plant-based food producer Miyoko’s Kitchen. The judgment determined that the state of California may not regulate the company’s use of the terms “butter,” “lactose free,” “cruelty free,” and “revolutionizing dairy with plants.” Miyoko’s filed a lawsuit (Miyoko’s Kitchen v. Ross, No. 3:20-cv-00893) in February 2020 after receiving a letter from California’s Department of Food and Agriculture (CDFA) ordering the company to remove the terms from its “Cultured Vegan Plant Butter” label and take down pictures of “animal agriculture” from its website.  

  • The USDA is updating the Coronavirus Food Assistance Program 2 (CFAP 2) for contract producers of eligible livestock and poultry and producers of specialty crops and other sales-based commodities. Additionally, USDA’s FSA has set an Oct. 12 deadline for all eligible producers to apply for or modify applications for CFAP 2. For more details, click here.  end mark