Here are the news items affecting dairy producers' bottom line at the start of June.

Lee karen
Karen Lee
Managing Editor / Progressive Dairy

Farmer sentiment sees some recovery

Following a sharp drop in April, farmer sentiment started to recover in May thanks to strengthening crop prices and good corn and soybean planting progress, according to the latest Purdue University/CME Group Ag Economy Barometer.

“Producers’ outlook on capital investments improved in May, but producers maintained a cautious attitude toward investments,” said James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.

High inventories at machinery dealers are adding optimism, while interest rates and relatively high prices for farm machinery and new construction are keeping producers cautious about investments.

Interest in leasing farmland for solar energy production continues to rise. Combining results from both the April and May barometer surveys, approximately 30% of respondents who have discussed leasing with a company have signed a solar energy lease on farmland they control.

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The Ag Economy Barometer provides a monthly snapshot of farmer sentiment regarding the state of the agricultural economy. The survey collects responses from 400 producers whose annual market value of production is equal to or exceeds $500,000. Minimum targets by enterprise are as follows: 53% corn/soybeans, 14% wheat, 3% cotton, 19% beef cattle, 5% dairy and 6% hogs. Latest survey results, released June 4, reflect ag producer outlooks as of May 13-17.

GDT index up 1.7%

The price index of dairy product prices sold on the Global Dairy Trade (GDT) platform increased 1.7% in an auction held June 4. Compared to the previous auction, prices for individual product categories were mostly higher, with the exception of mozzarella, which wasn’t traded, and lactose, which was down 1.9%. Buttermilk powder posted the largest gain at 10.4%. Skim milk powder increased 3%. Both butter and whole milk powder were up 1.7%, while anhydrous milkfat and cheddar cheese were up marginally.

The GDT platform offers dairy products from several global companies: Fonterra (New Zealand), Darigold, Valley Milk and Dairy America (U.S.), Arla (Denmark), Arla Foods Ingredients (Denmark) BMI (Germany), Kerry Dairy (Ireland) and Solarec (Belgium).

The next GDT auction is June 18.

June FSA interest rates continue upward trend

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

  • Farm operating loans (direct): 5.375%, up from 5.25%
  • Farm ownership loans (direct): 5.625%, up from 5.5%
  • Farm ownership loans (direct, joint financing): 3.625%, up from 3.5%
  • Farm ownership loans (down payment): 1.625%, up from 1.5%
  • 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.

Sign-up open for USDA’s Grassland Conservation Reserve Program

The USDA announced that agricultural producers and private landowners can sign up for the Grassland Conservation Reserve Program (Grassland CRP) now through June 28, 2024.

This is a voluntary working lands conservation program that enables participants to conserve grasslands and provide important conservation benefits for wildlife, soil health and carbon sequestration, all while continuing most grazing and haying practices.

More than 2.3 million acres from agricultural producers and private landowners were accepted through the 2023 Grassland CRP sign-up. The current total participation in Grassland CRP is 8.64 million acres, which is part of the 24.8 million acres enrolled in CRP opportunities overall.

The FSA is also accepting applications for the Continuous CRP sign-up, which opened in January 2023. Under this enrollment, producers and landowners can enroll in CRP throughout the year. 

Landowners and producers interested in CRP should contact their local USDA Service Center to learn more or to apply for the program.

FARM Program opens nominations for 2024 FARM Excellence Awards

The FARM Program announced that it has opened the nomination period for the 2024 FARM Excellence Awards. These awards spotlight participating farms and FARM evaluators that demonstrate excellence in their engagement with the FARM Program. 

Awards are divided into four categories: Animal Care & Antibiotic Stewardship, Environmental Stewardship, Workforce Development and FARM Evaluator of the Year.

Nominations are accepted from fellow dairy farmers, members of the community, extensions, cooperative or processor staff, veterinarians, themselves or others. Nominations are open until 11:59 p.m. PDT Aug. 1 through the online form on the FARM website. 

Winners in each category will receive a hotel room and travel for two individuals to attend the Dairy Joint Annual Meeting Oct. 20-23 in Phoenix, Arizona, where awards will be presented during a special luncheon. Visit the FARM Excellence Awards page for more details.

U.S. dairy groups ally with Colombian dairy association

The National Milk Producers Federation (NMPF), the U.S. Dairy Export Council (USDEC) and the Colombian Association of Dairy Industry (Asoleche) signed a memorandum of understanding (MOU) to increase cooperation between the U.S. and Colombian dairy industries as they advocate for pro-trade and science-based policies.

The agreement details objectives focused on improving communications and knowledge-sharing between the two industries, highlighting the economic and social importance of the dairy industry, and eliminating trade barriers that harm producers and consumers alike.

“This agreement is another significant step in the U.S. dairy industry’s commitment to working with and supporting our partners in Colombia and across Latin America,” said Krysta Harden, president and CEO of USDEC. “Both industries benefit when we have a robust trade relationship. ”

Ana María Gómez Montes, executive president of Asoleche, said, “This partnership with USDEC and NMPF will enable us to promote milk consumption, which is one of the greatest challenges we face as a dairy chain in Colombia. It will also provide us with more tools for innovation through the exchange of knowledge between industries.”

The MOU complements similar agreements USDEC and NMPF have made throughout Latin America, including with Sociedad Rural Argentina, the Inter-American Institute for Cooperation on Agriculture (IICA) and the Chilean Federacion Nacional de Productores de Leche (Fedeleche).