Here is a summary of the latest news affecting your dairy operation's bottom line.

Lee karen
Karen Lee
Managing Editor / Progressive Dairy

Vitaliano: U.S. dairy exports rebound as milk production slowly slips

U.S. dairy exports posted a February record, 17.3% of U.S. milk solids production equivalent, even as domestic commercial use of milk in all products showed its first monthly drop since January 2023, according to National Milk Producers Federation’s Peter Vitaliano. Summarizing dairy markets in the April 2024 Dairy Management Inc./National Milk Producers Federation Dairy Market Report, he said the year-over-year deficit in U.S. milk production continued to grow, with February production down over a year ago by 1.3%, adjusted for leap year.

Monthly National Dairy Products Sales Report (NDPSR) and federal order Class prices showed mostly modest gains from February to March, while the U.S. average all-milk price rose by $0.50 per hundredweight (cwt) from a month earlier to February’s $20.60 per cwt.

For more information on commercial use, dairy trade, milk production, product inventories, prices and margins, view the April 2024 Dairy Market Report.

Rabobank: Milk production declines in northwestern Europe

A recent Rabobank report highlights a structural decline in milk production in northwestern Europe. This trend is impacting operational efficiency and financial stability, leading to potential revenue losses and heightened competition for milk.

Advertisement

After the removal of milk quotas and other positive economic factors, the dairy industry in the region that includes Denmark, Germany, the Netherlands and Belgium had considerable growth over the past decade. However, now it is showing signs of a structural downturn in milk production due to an extended period of weakened margins, environmental regulations, labor shortages and increased climate volatility. Rabobank’s projections indicate that milk production could fall by as much as 20% by 2035.

Richard Scheper, dairy analyst for Rabobank, says a strategic shift by dairy companies toward high-value products could counterbalance rising costs and preserve market competitiveness.

May FSA interest rates tick upward

The announced interest rates on loans through the USDA’s Farm Service Agency (FSA) are slightly higher this month. As we begin May 2024, interest rates for operating and ownership loans (compared to April) are as follows:

  • Farm operating loans (direct): 5.25%, up from 5.125%
  • Farm ownership loans (direct): 5.5%, up from 5.375%
  • Farm ownership loans (direct, joint financing): 3.5%, up from 3.375%
  • Farm ownership loans (down payment): 1.5%, unchanged
  • Emergency Loan (amount of actual loss): 3.75%, unchanged

The FSA also offers guaranteed loans through commercial lenders at rates set by those lenders. For more information, producers can contact their local USDA Service Center.

USDA offers climate-smart opportunities using farm loan programs

The FSA offers multiple types of loans to help farmers and ranchers start, expand or maintain a family agricultural operation. These loans can provide the capital needed to invest in climate-smart practices and equipment including the establishment of rotational grazing systems, precision agriculture equipment or machinery for conversion to no-till residue management. Additionally, for programs like the Conservation Reserve Program and NRCS conservation programs where the USDA and the producer share the implementation cost, a farm loan could be used for the producer’s share, if consistent with the authorized loan purpose.

Some additional ways farm loans can be leveraged to invest in climate-smart agriculture practices or equipment include:

  • Precision agriculture equipment – Eligible producers could use a term operating loan to purchase equipment like GPS globes, monitors or strip-till fertilizer equipment.
  • Cover crops – Eligible producers could use an annual operating loan for seed costs.
  • No/reduced till – Eligible producers could use a term operating loan to purchase equipment.
  • Livestock facility air scrubber or waste treatment – Eligible producers could use a farm ownership loan for capital improvements to livestock facilities.
  • Cross fencing – Eligible producers could use an annual or term operating loan to purchase fencing and installation equipment.

Visit the Climate-Smart Agriculture and Forestry webpage to learn more and see detailed examples of how an FSA farm loan can support climate-smart agriculture practices.

U.S. Department of Labor finalizes farmworker protection rule

The Department of Labor has unveiled a final rule to fortify protections for workers, particularly those under the H-2A program. The rule addresses vulnerabilities and abuses experienced by H-2A workers, thereby upholding fair labor standards for all farmworkers in the country.

Under the H-2A program, employers can recruit temporary foreign workers when a shortage of qualified U.S. labor exists.

“H-2A workers too frequently face abusive working conditions that undercut all farmworkers in the U.S.,” said acting Secretary Julie Su. “This rule ensures farmworkers employed through the H-2A program are treated fairly, have a voice in their workplace and are able to perform their work safely. It also promotes employer accountability, benefitting all farmworkers by upholding labor standards.”

Key components of the final rule include: adding new protections for worker self-advocacy, clarifying “for cause” termination, making foreign labor recruitment more transparent, ensuring timely wage changes for H-2A workers, improving transportation safety, preventing labor exploitation and human trafficking, and ensuring employer accountability.

The final rule is effective June 28, however applications filed before Aug. 28 will be processed under existing regulations, those submitted afterward will adhere to the provisions outlined in the Farmworker Protection Rule.

For more information about the rule, visit the Employment and Training Administration and Wage and Hour Division webpages.

USDA releases final cattle traceability rule

By amending and strengthening its animal disease traceability regulations for certain cattle and bison, the USDA Animal and Plant Health Inspection Service (APHIS) is putting in place the technology, tools and processes to help quickly pinpoint and respond to costly foreign animal diseases.

A final rule released in April amends a 2013 rule for that requires sexually intact cattle 18 months of age or older, rodeo and exhibition cattle, and dairy cattle moving interstate to have an official form of animal identification.

The previous rule required visual eartags, whereas the new final rule switches to electronic ID tags, which are easier to read and would yield a faster traceability response during a foreign animal disease outbreak.

The rule will be published in the Federal Register in the coming weeks. This rule will be effective 180 days after publication in the Federal Register.

Minnesota Milk files court motion to participate in stray voltage claims case

On April 24, the Minnesota Milk Producers Association filed a request to the Minnesota Supreme Court to participate in the Clay View Dairy case as an amicus curiae. The request aims to clarify the statute of limitations for stray voltage claims filed in Minnesota. Currently, most courts apply a two-year statute of limitations. Minnesota Milk is advocating to have a six-year statute of limitations apply instead.

Stray voltage is a problem for many dairy farmers throughout the state, in this case and beyond. Due to challenges, such as difficult detection, the longer statute of limitations is needed for this case and future cases.

“Our request to participate in this case is effectively an ask to consider all cases in the future,” said Minnesota Milk Executive Director Lucas Sjostrom. “We’re taking these steps to ensure Minnesota farmers have the support and time needed to identify stray voltage problems and make any necessary claims.”