As we close the books on 2024, Progressive Dairy’s editorial team identified four trending topics that made headlines throughout the year. Read on as we recap highly pathogenic avian influenza (HPAI) detected in dairy cattle, Federal Milk Marketing Order (FMMO) modernization efforts, increasing dairy margins and declining dairy cattle inventories.
HPAI found in dairy cows
By Managing Editor Karen Lee
The most unexpected story of 2024 began shortly after the start of the year. Dairy farmers in the Southwest noticed there was something going on with mid-lactation cows. These animals were displaying similar clinical signs of going off feed; dropping in milk production; having thick, discolored milk; abnormal and tacky feces; and fever.
Veterinarians collaborated with state and federal health officials and veterinary diagnostic laboratories to develop a case definition by monitoring and evaluating affected dairy cattle and conducting additional diagnostics.
Reports that deceased wild birds were found on some of the farms prompted additional testing. On March 25, the USDA confirmed positive tests from raw milk samples and an oropharyngeal swab from sick dairy cows as positive for HPAI. Just five days earlier, the first livestock case ever of HPAI was found in a baby goat in Minnesota.
Dairy farms across the country were and continue to be urged to use enhanced biosecurity methods. A federal order was put in place requiring testing prior to the interstate movement of dairy cattle and some states implemented additional measures.
The commercial milk supply remained safe as the Grade “A” Pasteurized Milk Ordinance does not allow milk appearing to be abnormal to be sold for human consumption. In addition, pasteurization was found to be effective at killing the HPAI virus.
Initially 5% to 10% of herds were infected. Most animals recovered in two to three weeks, while those that did not bounce back in milk were culled.
As of press deadline, there have been 616 confirmed cases of HPAI in dairy cattle in 15 states. California, one of the more recent states to contract the disease, has been the hardest hit with 402 confirmed cases. Other states include Colorado (64), Idaho (35), Michigan (29), Texas (26), Iowa (13), Utah (13), Minnesota (9), New Mexico (9), South Dakota (7), Kansas (4), Oklahoma (2), North Carolina (1), Ohio (1) and Wyoming (1).
Nationwide, milk production for the first three quarters of 2024 is almost the same as last year (down by 0.26%). However, October milk production in California is down 5.6% (189 million pounds) since August when HPAI was first detected there.
Humans, primarily those exposed to infected animals, have also contracted the H5N1 virus. There have been 31 human cases connected to working with dairy cattle. These farm workers all described mild symptoms, many with eye redness or discharge (conjunctivitis). A few workers reported some mild upper respiratory symptoms. None of the workers were hospitalized. Dairy workers are encouraged to wear PPE, especially if working with sick cattle.
The USDA offers financial support for dairy producers for farm biosecurity plans, PPE for employees, testing and reimbursement for lost milk.
In late October, the USDA announced plans to work with state and private veterinary groups to carry out bulk milk testing at the regional level with additional testing at the farm level if necessary, until herds in an area are determined to be free of the virus.
In addition, the USDA is supporting the rapid development and timely approval of an H5N1 vaccine for dairy cows and other species. Two vaccine candidates are currently undergoing field trials.
FMMO modernization … almost there
By Editor Kimmi Devaney
What a year for dairy policy. While the farm bill has not made it across the finish line (yet), the USDA and the dairy industry have made strides toward FMMO modernization with changes potentially affecting five categories of milk pricing.
After 49 days of testimony and multiple recesses, the hearing concluded in late January, breaking the record for the longest hearing in USDA history. The USDA accepted and heard testimony on 21 of the 40 proposals submitted by industry stakeholders to modernize milk prices. New during this hearing was the opportunity for dairy producers to testify virtually on most Fridays, which many producers said was very helpful during harvest when they were unable to travel to Indiana to testify in person. More than 50 dairy producers from across the U.S. testified in person or virtually, in addition to many cooperatives, industry representatives and milk processors.
After the hearing concluded, the presiding judges had two weeks to review and certify the record. Then the industry had 30 days to submit corrections to the transcript and 60 days to file post-hearing briefs. Following that, the USDA had 90 days to issue a recommended decision in the Federal Register.
The USDA’s recommended decision was published in the Federal Register on July 15, marking the start of the 60-day comment period that ended Sept. 13.
Once the comment period closed, the USDA had 60 days to develop their final decision, which was released on Nov. 12. The referendum process begins once it is published in the Federal Register.
Here is an overview of the proposed amendments included in the final decision. Dairy producers and cooperatives will have until Dec. 31 to cast their ballots.
Income-over-feed-cost margins surpass expectations
By Editor Jenn Coyne
After 12 months of record-low margins and record-high indemnity payments, there was anxiousness for the continuity of the Dairy Margin Coverage (DMC) program in 2024. However, the year began with a bit of uncertainty. The industry’s greatest safety net program was extended another year through the Further Continuing Appropriations and Other Extensions Act, 2024, but as January began, an enrollment period was yet to be announced.
Six days before January’s DMC margin was announced on Feb. 29, the USDA Farm Service Agency outlined enrollment details for the 2024 program year. New in 2024 was an opportunity for producers to make a one-time adjustment to established production history by combining previously established supplemental production history with DMC production history for those operations that participated in the program during a prior coverage year.
Producers had until April 29 to enroll. During this time, they could also gauge the program’s effectiveness as margins were announced and all payments were set to be retroactive to Jan. 1. By the time enrollment closed, producers knew January and February margins.
The first two months’ margins followed suit with 2023 values, triggering payments below the $9.50-per-hundredweight (cwt) threshold in Tier I, albeit much higher than the catastrophic margins realized six months earlier. In January, lower feed costs lessened the blow of suppressed milk prices, but combined, resulted in an income-over-feed cost margin of $8.48 per cwt. February’s all-milk price rose some and contributed to a margin of $9.44 per cwt.
By March, the script began to flip as income-over-feed-cost margins improved. Throughout the year, milk production steadied and demand remained strong, forcing higher milk prices; at the same time, estimated record crop yields dampened that price outlook, shrinking feed costs to some of the lowest values since 2020. August’s realized margin made an impressive notch in the record books at $13.72 per cwt, the largest margin in the program’s five-year run, only to be outdone a month later as the September margin settled at $15.57 per cwt. Not only was September’s margin the largest on record at the time of print, but it’s also a dramatic 84% increase from the margin during the same month last year.
As of Oct. 7, nearly 73% of all operations with established production history are enrolled in the program. And so far, the DMC program has provided $36.4 million to producers enrolled in coverage.
At the time of this writing, October, November and December margins were forecast in the $12 to $14 range, with the year anticipated to settle at an average margin of $11.86 per cwt as the average all-milk price is forecast at $22.60 per cwt and average feed costs at $10.74 per cwt. Yet, markets do change.
According to a USDA spokesperson, currently, FSA does not have authority to enter into new contracts for DMC nor hold a sign-up for 2025.
Low dairy cow, replacement heifer numbers push prices higher
By Editor Audrey Schmitz
Earlier this year, the USDA’s semiannual estimate of cattle inventories indicated the number of dairy cows to start 2024 was the lowest in four years. With lower cow numbers and increased crossbreeding to beef sires, the number of dairy replacement heifers to start the year was also the lowest in nearly two decades.
As of Jan. 1, U.S. dairy herds contained about 9.35 million dairy cows that calved in 2023 and was the smallest number of milk cows to start a year since 2020. The number continued to decline throughout the year, and based on preliminary September 2024 estimates, U.S. cow numbers are currently at 9.28 million head, down 38,000 from a year earlier. Lower cow numbers have trailed a year earlier since May 2023.
Tightening cow and heifer numbers pushed average prices for U.S. replacement dairy cows to a nine-year high in January, averaging $1,890 per head. Prices continued to climb entering the fourth quarter of 2024, hitting a new record-breaking high as replacement dairy cow prices averaged $2,600 per head in October 2024. If realized, this number is up $710 from January and up $750 (41%) from a year earlier in October 2023.
Dwindling cow numbers have impacted not only replacement prices but also dairy cow culling rates. Based on USDA data, the number of dairy cull cows marketed through U.S. slaughter plants has trailed a year earlier since early September 2023. Year-to-date slaughter was estimated at 2.06 million head, down 323,900 from the same period a year ago and the lowest nine-month total to start the year since 2008.
Meanwhile, average cull cow prices set a record high in May and have since remained near record highs. The previous record-high average prices were last seen in the second half of 2014. With a month lag in reporting data, the USDA’s Ag Prices report indicated U.S. average prices received for cull cows (beef and dairy, combined) in September averaged $136 per cwt, down $6 from August but still near the highest average on record and up $22 per cwt compared to a year earlier.
